Net income group share: € 51 million
Normalized net income group share[1]: € 72 million, up +16.0%

All 2017 objectives raised

New acquisition: acquisition of the leading payment processor

in the Baltics

Bezons, July 25th, 2017 – Worldline [Euronext: WLN], European leader in the payments and transactional services industry, today announced its 2017 first half results.

Gilles Grapinet, Worldline CEO said:

“Worldline announces today a strong set of results for the first half of 2017, with in particular a solid revenue growth performance in Financial Services and in Merchant Services during the second quarter, a dynamic transaction volume growth and confirmation of the favorable business trends in India. Together with the strong free cash flow generation, I was particularly pleased by the improvement of the Group’s profitability during this past semester, thanks to the accelerated execution of the equensWorldline, PaySquare and KB SmartPay integration and synergy plans. Consequently, following the good performance of H1 2017, the Group decided to raise all its full year objectives for 2017 and now anticipates a revenue growth between +3.5% and +4.0%, an OMDA above 20.5% and a free cash flow above € 170 million.”

2017 first half key figures

For the analysis of the Group’s performance, revenue and operating margin before depreciation and amortization (OMDA) for the first semester of 2017 are compared with H1 2016 revenue and OMDA at constant scope and exchange rates. Worldline’s first-half performance, on a like-for-like basis compared with last year, was as follows:

H1 2017 key figures

In € Million

H1 2017

H1 2016

% Growth

Revenue*

778.1

765.1

+1.7%

OMDA*

153.5

138.1

+11.2%

% of revenue

19.7%

18.1%

+170bp

Net income Group share

50.8

92.1

-44.8%

% of revenue

6.5%

12.0%

Normalized net income Group share**

71.9

62.0

+16.0%

% of revenue

9.2%

8.1%

Free cash flow

88.0

70.0

+25.7%

Closing net cash***

440.1

386.4

+13.9

* At constant scope and June 2017 YTD average exchange rates
** Adjusted on restructuring, rationalization, integration and acquisition charges, disposals, carve-out and PPA amortization, net of tax; and reflecting in H1 2016 the reclassification of equity-based compensation (IFRS2) expenses in other operating expense
*** H1 2016 adjusted to reflect the change in presentation disclosed in Note "Accounting rules and policies"

At constant scope and exchange rates, Worldline revenue stood at € 778.1 million representing an organic growth of +1.7% at the end of June 2017 compared with the first half of 2016. The Global Business Lines Merchant Services and Financial Services contributed to the revenue growth, while Mobility & e-Transactional Services was still impacted, as in H2 2016, by the termination of one historical contract in France (the “Radar” contract), which occurred in June 2016 and which therefore has affected Worldline growth for the last time during this H1 2017. Excluding the comparison basis impact resulting from this contract termination, the growth rate of the rest of the businesses was above +6%.

The Group’s OMDA reached € 153.5 million or 19.7% of revenue, i.e. an increase of +170 basis points, fully in line with the objective initially set for the full year to reach an OMDA percentage of between 20.0% to 20.5%, corresponding to an ambition to increase OMDA between +150 to +200 basis points.

Normalized net income[2] stood at € 71.9 million and progressed by +16.0%. Net income Group share stood at € 50.8 million, decreasing by € 41.3 million compared with the same period last year, which included the exceptional profit from the disposal of the Visa Europe share.

Net cash reached € 440.1 million, increasing by €+92.4 million compared with the net cash position as at December 31, 2016, which was adjusted by €-51.2 million to reflect the presentation of assets and liabilities related to intermediation activities[3].

Performance per Global Business Lines

Revenue

OMDA

OMDA %

In € Million

H1 2017

H1 2016*

% Growth

H1 2017

H1 2016*

H1 2017

H1 2016*

Merchant Services & Terminals

260.8

247.8

+5.2%

53.3

51.8

20.4%

20.9%

Financial Services

345.1

326.6

+5.7%

88.9

65.2

25.8%

20.0%

Mobility & e-Transactional Services

172.2

190.6

-9.7%

22.7

29.8

13.2%

15.6%

Corporate costs

-11.3

-8.7

-1.5%

-1.1%

Worldline

778.1

765.1

+1.7%

153.5

138.1

19.7%

18.1%

* At constant scope and June 2017 YTD average exchange rates

Merchant Services

Merchant Services & Terminals

In € Million

H1 2017

H1 2016*

% Growth

Revenue

260.8

247.8

+5.2%

OMDA

53.3

51.8

% OMDA

20.4%

20.9%

-50 bp

* At constant scope and June 2017 YTD average exchange rates

Merchant Services, which represented 34% of Worldline’s revenue, grew by +5.2% organically and reached € 260.8 million, with a significant growth acceleration during the second quarter at +8.5%.

The growth mainly came from Merchant Payment Services, which benefitted from a strong momentum in India with the demonetization impact leading to higher volumes of transactions (x2.5 versus H1 last year), a continuous volume increase and positive business trends at PaySquare and KB SmartPay. These good operational performances more than compensated the negative price/volume mix effect that was anticipated in Belgium in Commercial Acquiring, as the Group decided to adapt its pricing structure to retrocede the interchange fee reduction benefit to its clients.

Merchant Services’ OMDA reached € 53.3 million or 20.4% of revenue (-50 basis points). Despite the very good dynamism of Merchant Payment Services in India and the overall transaction volume growth, the Global Business Line was indeed impacted by the adaptation of its pricing structure to retrocede the interchange fee reduction.

Financial Services

Financial Services

In € Million

H1 2017

H1 2016*

% Growth

Revenue

345.1

326.6

+5.7%

OMDA

88.9

65.2

% OMDA

25.8%

20.0%

+580 bp

* At constant scope and June 2017 YTD average exchange rates

Representing 44% of Worldline’s revenue, Financial Services reached € 345.1 million, up +5.7% organically. All four business divisions contributed to that growth:

Revenue in Issuing processing grew thanks to a high level of fraud management services in Belgium, continued strong growth in authentication services over the period (ACS, 3D Secure) and significant project work. Revenue increase was also sustained by the overall card payment transaction growth (+14%).

Acquiring processing was also particularly dynamic during the period thanks to more volume and projects mainly in Italy and in France.

Digital banking grew mainly thanks to continued development and good fertilization on project related activities in France.

The business line Accounts Payments grew along with transaction volume growth of SEPA payment in the Netherlands and in Germany, as well as volume growth for iDeal in the Netherlands.

Financial Services reached an OMDA of € 88.9 million (25.8% or revenue) representing an organic increase of +580 basis points, thanks to volume growth, particularly in Acquiring and Issuing Processing, and also to significant savings in the cost base (notably a reduction of external costs in equensWorldline), resulting from the accelerated implementation of the synergy plan that started end of last year following the integration of equensWorldline.

Mobility & e-Transactional Services

Mobility & e-Transactional Services

In € Million

H1 2017

H1 2016*

% Growth

Revenue

172.2

190.6

-9.7%

OMDA

22.7

29.8

% OMDA

13.2%

15.6%

-240 bp

* At constant scope and June 2017 YTD average exchange rates

Representing 22% of total revenue, Mobility & e-Transactional Services (“MeTS”) revenue was € 172.2 million, decreasing by -9.7% organically, as the Trusted Digitization (former « e-Government collection ») business line was impacted as planned and for the last semester, by the termination of the French automated traffic offence management system (the “RADAR” contract) that occurred in June 2016. Excluding that effect, the growth of MeTS would have been c.+9% in H1 2017. This performance could be achieved thanks to:

A strong activity in Trusted Digitization, particularly in healthcare transactional services and tax collection activities in Latin America and in France with more revenue from various projects with government agencies;

A robust growth in e-Ticketing, benefiting from a good dynamic in Latin America, thanks to higher fare collections revenue; and

A double digit growth in e-Consumer & Mobility explained by a good project activity in France and in Germany.

Mobility & e-Transactional Services OMDA reached €22.7 million or 13.2% of revenue, decreasing by -240 basis points. Despite margin improvement in the UK (end of loss making projects in 2016) and in Latin America (higher e-Ticketing volumes and price renegotiation), the OMDA was temporarily impacted by the end of a mature contract (Radar), which was partly substituted by new business consisting of project activities and ramping-up volumes with a lower profitability.

Commercial activity and key achievements of the second quarter

Merchant Services

The Global Business Line renewed an important long term Private Label Cards contract with Whitbread Plc in the UK and a large contract was concluded with Arriva Rail London for the provision of ticketing digital kiosks. An end-to-end acceptance and e-commerce solution across 16 countries was sold to Trinity Purchasing, an international procurement organization active in the hospitality sector. Last, following its successful launch, Worldline’s new unattended payment terminal Valina has received its first significant orders.

During the first semester, Worldline India played a crucial role in digitalization drive by deploying a total of 415,000 net installations of terminals and QR code acceptance. As of June 2017, Worldline was managing about 740,000 POS terminals in addition to 140,000 alternative touch points (QR code, PC POS) which, beyond their short term contribution to the turn-over of the division are set to generate additional recurring revenues in the future.

Financial Services

Several long-term strategic contracts were renewed during the quarter, in particular with tier-1 banks in Belgium and the Netherlands (Issuing processing). Also, a major Finnish bank decided to consolidate all its issuing processing volumes with equensWorldline. In APAC a new payment licensing contract was concluded with RHB Bank Berhad and a new client was won in Indonesia for issuing Processing services (Lanka Orix Finance Plc).

equensWorldline was particularly involved during the second quarter in the deployment of new payments means or form factors:

Belfius bank started its rollout of the HCE Mobile Payment solution based on equensWorldline technology and products, enabling the use of Maestro-, Visa- and MasterCard, but also the Belgium local scheme Bancontact with the mobile phone, allowing Cardholders to use their Android mobile phone for payments.

equensWorldline is positioned as a major actor for the adoption of instant payments. In particular, following the decision by the Governing Council of the European Central Bank (ECB) to develop a new service for the settlement of instant payments (called “TIPS”), equensWorldline announced it will connect its European and national Instant Payments Clearing and Settlement services to TIPS from the first day TIPS is operational.

Last, in terms of partnership, equensWorldline signed an agreement with Visa to join the Visa Digital Enablement Program (VDEP) and more specifically to become a VISA Issuer and Token Requestor Service Provider (TSP). This agreement enables the Group to offer its issuer clients the possibility to tokenize their Visa cards portfolio into digital wallets and use it for NFC contactless mobile payments.

Mobility & e-Transactional Services

Key highlights of MeTS’ commercial activity during the second quarter were the following:

In e-Consumer & Mobility, Worldline, together with Atos, will implement in the UK for a Dutch insurer “Worldline Contact", in order to deliver a state of the art contact center, enabling improvement of business continuity, customer experience, and agent flexibility. Also, the Group is further expanding business delivered with Contact in Banking sector by signing a new contract in France.

In e-Ticketing, a contract was signed with UK’s largest rail franchise, Govia Thameslink Railway, to replace the operator’s current desktop Ticketing Issuing Services (TIS) with the Worldline Mobile Ticketing Service, @Station, which will provide significant advantages of a Mobile point-of-sale system. Also, the Group will sell its rail operations suite of solutions and its onboard retailing solution, enabling the new South Western Rail franchise franchise selected to be able to operate from Day 1.

In Trusted Digitization, Worldline has signed a contract with the French Ministry of Justice to design and run the future highly secured information system that will be used to manage prisoners’ bracelets.

In terms of innovation, Worldline has entered an agreement with Apigee to combine and integrate Apigee Edge Software with its services and expertise to implement digital solutions. Also, Financed by the European Commission, a consortium of companies & entities led by Worldline will implement a Blockchain platform for media copyright information, to enable fast micropayments of media content and to increase transparency in copyright management and monetization.

Backlog

Backlog remained high at €2.6 billion.

On the commercial side, perspectives are very positive, with some large contracts to be signed in the coming months. The volume of new business is growing in different areas. Commercial trends in Financial Services are solid, with activity around PSD2 being very intense. Merchant Services is developing new services, and our Digital Platform is generating significant interest for its versatility. MeTS shows a good dynamic, in different areas such as Transport, Identity Management, Customer Contact Management, Healthcare and Traceability.

Integration and synergy plan

Regarding the integration and synergy plan of equensWorldline, the implementation speed of the program is faster than anticipated. While the Group fully confirms the objective of c.€ 40 million of OMDA run rate synergies expected in 2018, a higher benefit on the Group’s run-rate OMDA of c.€ 25 million is expected in 2017 (vs. c.€ 20 million communicated previously) from that program.

As a result, operating income for the first half of the year was € 85.6 million (€ 127.8 million as at June 30, 2016, as it included the proceeds from the sale of the Visa Europe share to Visa Inc for € 51.2 million).

Financial result was a charge of € 4.3 million, mainly due to foreign currency exchange lossesand the tax charge represented € 20.4 million (effective tax rate of 25.1%).

As the result of the items above, net income group share was € 50.8 million. Normalized net income[4] stood at € 71.9 million and progressed by +16.0%.

Free Cash Flow and net cash

Worldline free cash flow totaled € 88.0 million in line with the objective for the full year of between € 160 million and € 170 million and up +25.7% compared with H1 2016.

Net cash reached € 440.1 million, increasing by €+92.4 million compared with the net cash position as at December 31, 2016, which was adjusted by €-51.2 million to reflect the presentation of assets and liabilities related to intermediation activities[5].

M&A activities

Gilles Grapinet, Worldline CEO said:

“In addition to the acquisition of Digital River World Payments, a leading specialist in Online payments, which was announced a week ago, the acquisition of First Data Baltics that we announce today is a significant development for our Group to accelerate the execution of our Pan-European consolidation strategy in Financial Processing services. Through this transaction, we gain a leading position in the fast-developing countries of Latvia, Lithuania and Estonia, reinforce our group capabilities in the north of Europe and will establish new relationships with numerous prestigious Baltic and Nordic banks.

Beyond these two first transactions in 2017, the Group currently sees an unprecedented level of M&A opportunities in the payment space, notably in Europe. Based on its current pipeline of diversified potential transactions, Worldline has the ambition to realize several other M&A operations normally before the end of the year and, in doing so, to expand across various new geographies.”

Acquisition of Digital River World Pa

Worldline announced on July 17, 2017 it has entered into a definitive agreement to acquire 100 percent of the share capital of Digital River World Payment (“DRWP”), a leading online global payment service provider, from Digital River, Inc., a leading global provider of Commerce-as-a-Service solutions.

Founded in 1997 and headquartered in Stockholm, Sweden, DRWP is a subsidiary of Digital River and employs approximately 120 employees worldwide. With global payment gateway, multi-acquiring and collecting services under one roof and having generated yearly gross revenue of c. 37 million euros in 2016, DRWP delivers comprehensive online payment acceptance and optimization solutions for leading enterprise brands, spanning a variety of industries, including travel, retail, direct selling and digital goods. DRWP’s global platform and large geographical footprint support international payment schemes and currencies across 175 countries, a wide range of local payment brands and methods, and more than 40 acquiring bank connections. With its global reach, positioning as a PSP and collector, DRWP represents a perfect fit with Worldline’s existing and proven internet payment gateway, Sips.

Through the acquisition of DRWP, Worldline increases its internet payment capabilities, notably with online payment collecting services, and gain access to a client base composed of Tier 1 e-Merchants. The Group also expands its global reach to new geographies (USA, Brazil, Sweden). With this acquisition, Worldline is today in a unique position to deliver the next generation of payment services for the digital commerce market.

Worldline to acquire the leading payment processor in the Baltics from First Data Corporation

Worldline announce today the signature of an agreement with First Data Corporation (“FDC”) for the acquisition of 100% of the share capital of FDC’s fully owned subsidiaries in, Lithuania, Latvia, Estonia (together “First Data Baltics” or “FDB”) for c.€ 73 million, financed by available cash.

Having generated revenue of c. € 23 million in 2016, presenting a strong financial profile with EBITDA margin materially above Worldline’s EBITDA, FDB currently employs c.200 employees and is the leading financial processor in the Baltics, providing to the main Baltic banking groups and also to some banks in the wider Nordic region, a large range of outsourcing services.

Through this acquisition, Worldline gains a unique leading position in the fast-growing Baltic countries, significant development perspectives in the Baltics (n°1 in Latvia & Lithuania, n°2 in Estonia) thanks to structural electronic payments growth. Numerous synergy levers with Worldline portfolio have been identified allowing the acceleration of both revenue and profitability.

Please refer to the Press release issued today for more information about this acquisition.

On July 13, 2017, Worldline and Total signed a binding technological, commercial, and financing agreement with African fintech InTouch. Worldline and Total will support the deployment acceleration of the “Guichet Unique” platform in eight African countries (Senegal, Ivory Coast, Cameroon, Burkina Faso, Guinea (Conakry), Mali, Morocco and Kenya). This solution allows merchants to aggregate payment means (e.g. mobile money, payments through private label cards, cash) and to sell third party services (subscriptions to media content, bill settlements, money transfer, cards top-up, etc.) through a unique interface. As part of the agreement, Worldline will take along with Total a minority stake in InTouch and will provide, as a first step of a broader technological agreement, a secure and industrial hosting infrastructure to enable the fast deployment of Guichet Unique.

Disposal of the Cheque Service

As part of the regular review of its portfolio, the Group has decided to sell its Cheque Services business in France through a management buy-out, as there were low synergies with the other activities of Worldline and as this business was dilutive to the Group’s growth and profitability. This activity generated revenue of less than €20 million and was dilutive to the Group’s OMDA margin in 2016.

This transaction, which is supported by Cheque Service employees, will allow Cheque Service to pursue its commercial expansion in France.

Investor day

The Group announces that he will organize an Investor Day, to be held at his headquarters in Bezons, France, on October 3rd 2017 to present a general business u

2017 Objectives

The Group raises all the objectives for 2017 that were previously stated in the February 21, 2017 press release.

These objectives below do not include any contribution from Digital River World Payment and First Data Baltics and will be updated after the closing of these transactions to take into consideration their contribution after closing.

Revenue

The Group expects to achieve organic growth of its revenue, at constant scope and exchange rates between 3.5% and 4.0%

OMDA

The Group targets an OMDA margin of above 20.5%.

Free cash flow

The Group has the ambition to generate a free cash flow above € 170 million, including c. €20 million of synergy implementation costs

Reconciliation between the first half 2016 statutory revenue and first half 2016 revenue at constant scope and foreign exchange rates, per Global Service Line and by geography, is presented below

Revenue

In € million

H1 2016
Statutory

Scope effect

Internal Transfers

Exchange rates effect

H1 2016*

H12017

Merchant Services

210.1

+30.7

+8.3

-1.3

247.8

260.8

Financial Services

208.1

+127.0

-8.3

-0.2

326.6

345.1

Mobility & e-Transactional Services

196.6

-0.9

-5.1

190.6

172.2

Worldline

614.8

+156.8

0.0

-6.5

765.1

778.1

* At constant scope and June 2017 YTD average exchange rates

Revenue

In € million

H1 2016
Statutory

Scope effect

Internal Transfers

Exchange rates effect

H1 2016*

H12017

France

222.9

-0.2

222.7

198.5

Belgium

177.4

+0.9

178.3

176.3

Germany/CEE

65.8

+47.9

113.7

114.3

Netherlands

15.4

+69.2

84.6

96.0

Emerging markets

52.6

-0.3

52.3

75.6

North & South Europe

16.1

+39.0

55.1

59.6

United Kingdom

64.7

-6.2

58.4

57.7

Worldline

614.8

+156.8

0.0

-6.5

765.1

778.1

* At constant scope and June 2017 YTD average exchange rates

Scope effects refer mainly to the acquisitions of Equens, Paysquare and KB SmartPay on September 30, 2016. Hence, Equens, Paysquare and KB Smartpay revenue for the first semester of 2016 are included in the H1 2016 revenue at constant scope and exchange rates, for a like-for-like comparison with H1 2017. Internal transfers correspond to the reclassification in Merchant Services of the revenue from Worldline India previously classified in Financial Services, as this revenue relates primarily to business done directly or indirectly (through banks) with merchants. Exchange rate effects reflect mostly the depreciation of the British Pound versus the Euro.

OMDA

Reconciliation between the first half 2016 statutory OMDA and 2016 OMDA at constant scope and foreign exchange rates, per Global Service Line, is presented below:

OMDA

In € million

H1 2016
Statutory

Scope effect

Internal Transfers

Exchange rates effect

H1 2016*

H12017

Merchant Services

45.1

+4.0

+2.6

+0.1

51.8

53.3

Financial Services

50.8

+17.0

-2.6

+0.0

65.2

88.9

Mobility & e-Transactional Services

300.9

-0.0

-1.1

29.8

22.7

Corporate costs

-9.6

+0.9

-8.7

-11.3

Worldline

117.2

+21.8

0.0

-0.9

138.1

153.5

* At constant scope and June 2017 YTD average exchange rates

The 2016 figures presented in this press release are based on the constant foreign exchange rates data.

Conference call

Worldline’s CEO Gilles Grapinet, along with General Manager Marc-Henri Desportes, and Chief Financial Officer Eric Heurtaux will comment on the Group results for the first half of 2017 on Tuesday, July 25, 2017 at 6:15pm (CET- Paris).

Contacts

About Worldline

Worldline [Euronext: WLN] is the European leader in the payments and transactional services industry. Worldline delivers new-generation services, enabling its customers to offer smooth and innovative solutions to the end consumer. Key actor for B2B2C industries, with over 40 years of experience, Worldline supports and contributes to the success of all businesses and administrative services in a perpetually evolving market. Worldline offers a unique and flexible business model built around a global and growing portfolio, thus enabling end-to-end support. Worldline activities are organized around three axes: Merchant Services, Mobility & e-Transactional Services, Financial Services including equensWorldline. Worldline employs more than 8,700 people worldwide, with estimated pro forma revenue of more than € 1.5 billion on a yearly basis. Worldline is an Atos company. www.worldline.com

Disclaimer

This document contains further forward-looking statements that involve risks and uncertainties concerning the Group's expected growth and profitability in the future. Actual events or results may differ from those described in this document due to a number of risks and uncertainties that are described within the 2016 Registration Document filed with the Autorité des Marches Financiers (AMF) on April 28, 2017 under the registration number: R.17-032.

The review procedures on the interim financial information have been performed by the statutory auditors. Their review report is currently being issued.

Revenue and OMDA organic growth are presented at constant scope and exchange rates. 2017 objectives have been considered with June 2017 YTD average exchange rates.

This press release does not contain or constitute an offer of Worldline’s shares for sale or an invitation or inducement to invest in Worldline’s shares in France, the United States of America or any other jurisdiction.

[1] The normalized net income excludes unusual and infrequent items (net of tax).

[2] The normalized net income excludes unusual and infrequent items (net of tax).

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